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City votes to buy homes near ditch

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GREENFIELD — The city of Greenfield will offer to buy five local homes to have them demolished for the Potts Ditch relocation project.

The Greenfield Board of Works Tuesday agreed to offer a total of $265,000 for the homes at 20, 34, 35, 37 and 106 W. Fourth St. While the city has purchased strips of land for public improvement projects in the past, this is the first time the city could buy entire homes for one project.

Utility director Mike Fruth says the offers could help the homeowners get out of a floodway, but the city doesn’t intend to forcefully acquire the properties if the initial offers are refused.

“If the offer is accepted, we would work toward final papers to close that,” Fruth told the board. “If it’s not, we’re not going to continue. We have no plans at all to go through eminent domain to acquire those properties.”

Homeowners will each be offered between $48,500 and $58,000 for their homes, based on a recent appraisal of the properties. Fruth estimates it will cost just under $39,000 to demolish all five homes.

Homeowners will have 30 days to accept the offers.

The property acquisitions raised some eyebrows on the board two weeks ago, and questions were asked over how much it would cost to demolish the properties and whether the city needed to acquire them for the success of the project.

The board tabled the decision then, and several board members said they’ve been researching it and asking Fruth questions before they came to their decision 4-1 Tuesday to make the offers.

“Down the road, it could end up saving (the city) money,” board member Brent Lawson said, referring to the point Fruth has made about a contractor being able to more easily access Potts Ditch if the homes are gone.

Kathy Locke cast the lone dissenting vote. She said after the meeting she’s not against purchasing the homes entirely, but she was leery that three of the homes have mortgages and are obligated to have flood insurance. Flooding in December probably led to settlements, she said, and she doesn’t know whether they’ll end up making money on the offers in the long run.

Locke said the homes were appraised on average condition, but some of them are probably of below-average condition because of December’s flooding, during which up to 2 feet of water flowed inside the homes.

Locke added that it’s hard to tell whether the demolition of the homes could save money on construction costs, and no evidence has been brought to the board to prove that theory.

But board member Kelly McClarnon said he was comfortable with the city making offers on the homes and said their acquisition will help with construction.

“I’d be hard-pressed thinking these guys are receiving any kind of windfall,” McClarnon added.

Potts Ditch is a watershed that runs through the entire city, becoming an underground tunnel once it reaches the downtown area. The tunnel is undersized for the amount of water it handles during heavy rainfall, and homes in the downtown district occasionally flood.

City officials signed off last year on a $10 million relocation project. The Greenfield City Council tonight will consider an $11.5 million bond issue for the project. City controller Buzz Krohn said officials are still expecting bids to come in at $10 million or less, but the $11.5 million bond could be issued as a cushion in case bids come in higher than anticipated.

Fruth said if the homes along Fourth Street are demolished, that would make it easier for a contractor to negotiate the space at the main project site, where a new tunnel will be installed.

The homes are in a floodway, which is a type of area most susceptible to flooding. There’s no guarantee the Potts Ditch relocation will fix the flooding problem, and any permits for major renovations would have to be approved by the Indiana Department of Natural Resources. The DNR might tell landowners their homes need to be raised above the flood level, which could cost more than the home is worth, officials have discussed.

Lawson said Tuesday he doesn’t want the homes to become abandoned or turn into blight.

The city had budgeted roughly $300,000 for land acquisition for the Potts Ditch project. Fruth said the city will also need to acquire the property at 218 N. State St., but an appraisal hasn’t been made on that building yet.

Fruth also gave the board an updated timeline on the project. While wheels begin turning on financing tonight when the city council considers bonding for the project, Fruth said bids will be received April 22. The project will be awarded to a contractor June 10, and construction could begin by June 23. Construction – which will also include roadwork and detours in the downtown district – will continue through November 2015.

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